Effects of paternity leave reforms on family structure

Abstract

Parental and paternity leave policies have been used in developed countries to promote gender equality and curb the child penalty. However, these policies have a direct impact on how housework and childcare are organized within the household. Given the decline in fertility rates and the rise of single-parent households. I examine how the expansion and flexibilization of paternity leave affect union stability and future fertility. This study uses Finnish registry and social security data in a regression discontinuity setting to answer this question. The child’s due date is used as the running variable because it cannot be precisely manipulated by parents. Four paternity leave reforms from the 2000s are analyzed. Each reform introduced different changes regarding leave-entitlement expansion, flexibility, and benefit-replacement rate. Results suggest that flexibility is important for leave take-up. The most flexible reform, from 2010, increased the duration of paternity leave. It had a positive impact on fertility and a transient increase in union stability for individuals younger than 30 years.

• ISSN: 2984-2158 (Online)
• ISBN: 978-952-209-232-8 (Online)
• JEL: J12, J13
• Publication in PDF-format